Mobile service adoption is soaring. This year, alone, should see mobile phone subscribers worldwide jump from 4.6 billion to 5 billion by year’s end, according to the International Telecommunication Union. That customers can call a contact center at any time, from any place, presents some obvious customer service challenges—namely higher call volumes. But what if organizations could take advantage of cell phones, smartphones, and other mobile devices to improve customer service? That’s what some savvy telecommunications companies are banking on.

In 2007, research from Nuance Communications discovered that 74 percent of consumers calling contact centers were dialing from mobile phones. Sixty-eight percent of those consumers were calling with basic requests regarding billing, payments, plan changes, or account settings. Hetyl Pandya, director of products for Nuance Mobile Care, recognized these astonishing numbers early and, with her team, sought to create an application that could address these requests from a mobile phone.

In the pre-iPhone era, Pandya and her team developed Nuance Mobile Care, a self-service application that connects mobile subscribers to customer care for simple information requests and services. A customer with questions about billing or with a complaint need not bother with a toll-free number, but simply engage with an agent or the self-service application. “We were asked to [develop] ‘next-generation customer care on mobile devices,’” Pandya recalls. “We decided to come up with and deliver a really intuitive, extremely simple [option] to a customer…without them having to learn any new user behavior.”

At present, Nuance Mobile Care has been deployed on approximately 17 million devices with carriers such as AT&T and T-Mobile. Nuance Mobile Care’s success is reflective of a rapidly changing demographic that prefers self-reliance, self-service, and ever increasingly speedy transactions.

“It’s changing,” Pandya states. “People don’t even want to go inside [a store location] anymore. Talking to people can take more time. It can require people to be more patient and civil.”When pressed if this change in etiquette can be applied strictly to Generation Y, she quickly responds, “I don’t think it’s just young people.”

Ben Geller, senior director of product marketing at Alcatel-Lucent, agrees, responding that mobile service is showing promise in “all walks of life and age demographics.”

Nuance reports that of the 82 percent of consumers who prefer on-device self-service, 35 percent are between the ages of 36 and 50 years old, 38 percent are between 25 and 35, and 27 percent are between 18 and 24.

Pandya points out that although self-reliance doesn’t just belong to the younger generation, impatience often does.

“[Young kids] won’t use a self-service that is poorly delivered,” she warns. “If they feel that something is not being done efficiently…[they have] no patience for it…. Younger people are less tolerant.”

Pandya credits two major trends for mobile’s recent uptick: the low cost of service and the ongoing extinction of landlines. “There is no sort of barrier to using your mobile phone,” Pandya says. “There is no incremental cost…. There is also the penetration of mobile phones. Landlines are going away.”

According to a study by the National Center for Health Statistics, one in six American households operated without landlines in 2007. In New York alone, 55 percent of landlines have disappeared since 2000, and New Jersey has seen a 50 percent decrease.

This massive shift to mobile phones has, of course, brought inquiries about products, set-up, and billing. But Geller observes that many of these calls from mobile phones to customer service have become more complex with the passing years. Popular products like netbooks, laptops, Apple iPad tablets, Amazon Kindle e-book readers, and other similar devices have introduced a lot of complicated questions that cannot be solved in the standard seven- or eight-minute call to a contact center. The most common, he says, are how-to questions, such as “How do I send picture mail?” or “How do I set up email?” Geller says calls like these commonly run up to an hour in length.

“Because of this complexity, 15 percent of all handsets are returned to [the] manufacturer,” Geller says. “Sixty-three percent [of the time] nothing is wrong with the device. Customers just can’t get it set up.”

Geller notes that the average consumer will spend about 15 minutes setting up a new application on her smartphone before abandoning it. “Early adopters of technology,” he says, “have a heavy threshold for pain.” But the average consumer who picks up an e-book reader will be a little less comfortable with technology.

According to Geller, the help desk is equipped to see only parts of the “ecosystem,” and as a result, must resort to what he calls “swivel chair management.” With limited visibility in many help centers, agents have to switch from checking the back office, the handset, and then the network to properly diagnose customers’ problems with their mobile devices.

“[Agents] can no longer look at the customer experience in these individual silos,” Geller says.

With an eye toward this expanding “ecosystem,” Alcatel-Lucent has developed Motive Mobile CEM, an application on the consumer’s phone that instantly connects the consumer with the help desk. The agent is then given a holistic view via the Motive Customer Service Console into the consumer’s billing information and phone status, as well as the status of the network. What makes Motive Mobile Device Management so innovative, Geller says, is its complete obliteration of “swivel chair management.”

A holistic view of customer service is “one that is based on the help desk and the consumer—the ability to see what is happening by giving [companies] the tools to see how well the device is performing [in relation] to the network [and] to the back office. [Motive Mobile CEM] is a view of that world in context,” Geller explains.

In addition to giving the agent more visibility into customers’ problems with their mobile phones, Motive Mobile CEM is also proactive in terms of security and optimization. The application can intercept a data session that could have a virus and can assess that video content, for example, is not being streamed at its best. It can also tell customers that they have too many applications open, a common problem with smartphone performance.

Motive Mobile CEM guides a consumer through troubleshooting, eventually connecting that consumer to a help desk should the problem escalate. Although the application gives agents access to the consumer’s billing information, Geller says that standard practices of reciting mother’s maiden name, ZIP code, etc. for confirmation are advised. The application requires consent from consumers in each step, educating them to make decisions appropriate to their needs.

Mobile service applications similar to Motive Mobile CEM in their mobile-based CRM capabilities are also more cost-effective. The benefits of SMS, another alternative, enable multitasking, assistance in a weak coverage area, or privacy, if preferred. ContactBabel, a United Kingdom–based contact center analysis firm, reports that the average cost of a live-agent service call is approximately $12. An SMS interaction, on the other hand, costs mere pennies per message.

In terms of popularity, ABI Research forecasts mobile messaging revenues to grow to $212 billion by 2013. ABI Research also envisions mobile messaging services, including SMS and mobile email from mobile business customers, to reach $48 billion by 2014, and data access services revenues for handsets and computing devices to reach $43 billion by 2014.

“This is the first time in history when the customer preference and the company’s preference may align pretty well,” says RJ Auburn, chief technology officer of Voxeo, a vendor of IVR platforms and hosting for enterprises, contact centers, and developers.

Voxeo estimates that IM and SMS interactions are one-tenth the cost of IVR and one-hundredth the cost of live agent support. Like Motive Mobile CEM, SMS can be preemptive in alerting customers, specifically for scenarios that could result in high inbound call volume like service outages and travel delays. Other SMS capabilities enable customers to perform transactions such as confirming a scheduled appointment or paying a past-due bill.

Although mobile service is well-liked among people of all ages, text messaging is where the demographic peels off to the under-35 crowd. Auburn refers to this as a “magic age,” as the preference to communicate via SMS is much stronger with this group than speaking on the phone.

Auburn adds that members of the younger generation have “adapted their communication modes to [SMS]. Companies are seeing a lot of success by adding mobile interaction.”

Interacting with customers via SMS allows the issue to become what Auburn refers to as “a background problem”—less of a headache and requiring much less of their time. Text messaging also gives agents a context for every inquiry as opposed to running through the standards:

“What is your name?” “What product are you asking about?” “Why are you contacting us?”

Unlike an IVR, SMS can move through these more complex inquiries seamlessly. “The nice thing about this is that that consumer doesn’t see any of this happening,” Auburn points out. “They got their answer [via SMS].”

Pandya says one of the reasons mobile service can be so powerful, particularly with customers, is that it provides a visual component to service. “Seeing things visually delivers this confidence and [customers] understand what is being delivered to them,” she says, citing examples like self-service check-in at airports.

“The savvy companies have gotten this,” Auburn says. “There are a lot of leading-edge [companies], and over the next four to five years, we’ll see more and more copying.”

Auburn identifies T-Mobile as one of the companies that mastered mobile service very quickly.

“[T-Mobile] dealt a lot in prepaid mobile numbers. The margins on those are very, very razor thin. They were able to consolidate everything into one team that serves all those different communication channels: IVR, mobile Web, native iPhone clients, phone kiosks, Web sites,” Auburn explains.

Daniel Hendling, the international program manager for Deutsche Telekom (aka T-Mobile), says that successfully pushing mobile service has a lot to do with understanding the consumer’s need for speed and abolishing silos.

“[There is] the recognition that there is a different way to attack the problem and address the customer experience,” Geller comments. “It’s been an evolution. [Companies] recognize that it’s important to stitch these technologies together.”

Having grown up with the Internet, Millennials are accustomed to getting everything and anything in an instant. Their high expectations have coupled with technology in a way that has created a definite tipping point. And as they get older and gain more purchasing power their mobile demands will undoubtedly increase. Of course, companies such as Apple and Google are doing everything they can to compete for their business.

Hendling also notes that “technology and the device-producing companies like Apple made [mobile service] move forward…. [Apple] created the need for mobile service after the product was launched.”

What makes the intersection of mobile technology and the youth market most curious, though, Hendling says, is that 16- to 18-year-olds don’t have the funds to purchase a smartphone and all the applications and capabilities. He notes that this will most likely shift as smartphones get cheaper. “This was the case in the last year,” Hendling says. “In the next couple of years, this segment will be dominant.”

Despite the success of mobile service, Geller advises that companies should consider their entire customer base before making any drastic shifts in customer service. “Consumers do come in all shapes and sizes,” he says. “[There is a] large set of the consumer market that will want to have [traditional] assistance. They want to hear that voice and have someone get them through step by step. Both models are equally important.”

Auburn agrees, stating simply that “you can’t replace the telephone. There are certain requests where you need to talk to somebody, such as customer complaints. You’re not going to solve that problem with an IVR automation. You need that empathy and that human-to-human communication.”

Hendling envisions mobility becoming more important to understanding what customers want and how to get it to them. As someone who sees an iPad as just a big iPhone, he believes that slate devices and smartphones will eventually merge, bringing more communication to these types of devices.

“Online information will become more important for customers,” Hendling says, citing the rapid embrace of personal status updates across the social Web. Hendling says he approves of applications taking customers away from the Web, advocating the use of applications to tailor the Internet to the customer’s interests and location.

“The Internet is changing,” Hendling explains. “[It] is getting structure and the development of apps is an example. Customers have stopped searching and googling everything. They have areas of interest and they will get a prefiltered experience. The landscapes of apps are tailoring the Internet to the customer. [With apps] the customer knows what to expect and everything is clear.” Editorial Assistant Koa Beck can be reached at kbeck@destinationCRM.com.